By Jon Miller, Realtor®
1. You Don’t Get a Second Chance to Make a First Impression
Photos will be the first thing potential buyers see. Since home buyers are shopping for homes online, and getting alerts of new listings that match their criteria, the first time any buyer or agent will get a glimpse of your home will be the listing photos. Most people are perusing listings while they’re doing other things like standing in line at the store, riding the train to work, or watching TV. People will typically make a decision about whether or not they like a house within just a few seconds, often after seeing only 3-5 photos. If the photos don’t catch their attention they’ll simply swipe the screen and move on to the next listing. A professional photographer who understands lighting, angles, and composition will ensure that your home looks it’s best in the photos.
2. Staging Doesn’t Need to be Expensive
It’s extremely rare to walk into a home that’s photo-ready. Most of us can’t keep our homes pristine every day (and if you have kids it may never be pristine again). Home staging is all about getting your home looking it’s best, usually in it’s current condition. Most home sellers aren’t going to remodel their house before putting it on the market. But, a few staging techniques can help your home show it’s best. Things like removing excess furniture, organizing closets, and storing seldom used items can help a home feel more open and inviting. Paint and landscaping are relatively quick and inexpensive and often have the best returns on the time and money invested. Another easy and inexpensive change to make a home looks it’s best is to change light bulbs to the brightest allowable for the fixture and in a color that adds warmth to the room. An experienced agent can help you decide which items are the most important given your timeline and budget.
3. What to Fix
The answer to what to fix will vary depending on the overall condition of the home, the scope of the issues, and how much time and money you have to address repairs. There are two general categories of repairs, minor repairs and material defects. Minor repairs are inexpensive to repair but may be worth repairing if there’s a lot of known issues. Too many small issues can scare buyers away. Material defects are issues that are expensive to repair and therefore de-value the house. It’s not uncommon to be unaware of both minor and major issues, most will be uncovered when the buyer has a home inspection. There are two common ways to deal with known issues . . . either have them repaired or get estimates for repairs and reflect those costs in the asking price. As a side note, all known issues will need to be disclosed to potential buyers before they make an offer.
4. You Probably Don’t Need an Open House
Because it’s hard to keep a listing a secret, you probably don’t need to hold an open house. Potential buyers – those who are ready to move, willing to buy your house, and able to buy your house now – are either already working with an agent who can schedule a private showing. If they’re not working with an agent, they will click the ‘Schedule a Showing’ button on whichever online portal they’re on. Nobody will see their perfect house and decide not to buy it because there isn’t an open house. They will find a way to get in. Open houses typically attract “Just Looking” buyers who may buy something in the next 6-12 months and haven’t narrowed down their price range or area. “Lookers” love open houses because they don’t have to contact an agent or talk to a lender for mortgage pre-approval to see your home.
5. It’s Hard to Keep a Listing Secret
Home buyers shop for their future home online. By the time someone gets close to being ready to buy a home they’ve often been shopping online for months. They are getting daily updates from 2-3 sites like Zillow and Realtor.com. More than likely, they’re also getting listing alerts from their real estate agent, as well. If you’re home is listed on the Multiple Listing Service (MLS), the database that agents use to search and share listings, and it’s listed on the major portals there’s just about zero chance that a ready, willing, and able buyer – who’s looking for homes like yours in your area, price range, and condition – could possibly miss it.
6. Know the Value of Your Home & Your Mortgage Balance
Before listing your home for sale, there are a few important numbers to know. First, you’ll want to know how much you owe on your current mortgage. You can get this number by contacting your lender. You’ll need this number so you can estimate the proceeds from the sale of your home. If you’ll be buying a new home then your lender will need this to help narrow down the price range of your next home. Of course, you’ll also need to know the approximate value of your current home.
7. Online Value Estimates Aren’t Very Accurate
Who doesn’t love seeing what their home is worth with the click of a button on Zillow? Unfortunately, the Zestimate and other online value calculators are more for entertainment (and to get people back to the sites) than for accuracy. Just the other day I was looking at a single property that Zillow estimated as being worth $750,000. Trulia, which is owned by Zillow, had an estimate of $609,000. I checked two other sites that showed $692,000 and $654,000. Needless to say, a range of close to $150,000 isn’t much help. These calculators use different algorithms and estimates can be all over the place. Your real estate agent will be able to provide you with information on the value of your home based on recently sold comparable properties.
8. Buyers Can Spot an Overpriced Listing a Mile Away
An overpriced listing is a home with an asking price that’s too far above the price that buyers would be willing to pay for the home. By the time a buyer is close to ready to buy they’re signed up for automatic listing updates from several sources. They see every listing that may meet their needs and they know exactly what’s for sale and what sold. With so much access to information they know if an asking price is too high. Buyers don’t want to pay more than a home is worth and they don’t expect sellers will have much flexibility on their asking price so they don’t schedule showings on these properties or they schedule showings but won’t write an offer for fear of rejection.
9. How Long Should it Take to Sell?
The time that it takes to get an offer will vary, but there are some good benchmarks that you can use to get a sense of whether or not your home is on track. First, knowing the average days on market (DOM) for similar homes in your neighborhood is critical. If the typical home sells within 21 days and yours sits on the market for longer than that, it may be time to make some changes. The benchmark that I like to expect 1 offer for every 10 showings. As a general rule you can expect that 9 out of 10 buyers will find that your home isn’t the right fit for them or it’s one of the first they’ve seen and aren’t really ready to move forward. I like the 1 out of 10 benchmark because you may get 10 showings in the first weekend in which case you can expect a quick sale. On the other hand, if it’s been 30 days and you haven’t had 10 showings then it’s probably time to make some changes.
10. What Happens During Home Inspections
Most home buyers will perform a home inspection once a purchase contract is signed. Knowing what happens during the inspection, and how to deal with inspection issues, can help make the process a bit easier. Inspections typically include a visual home inspection, a radon inspection, and a termite/wood destroying insects inspection. The inspector’s job is to note every detail about the condition of the home so inspection reports are often between 35 and 45 pages long. The inspector may recommend that the buyer get further evaluation from specialists for certain systems (ie, heating/cooling, plumbing, electrical). In most cases, the buyer has the option of accepting the property as-is, requesting repairs and/or money toward repairs, or walking away from the purchase. It’s a wise plan to budget for possible repairs. If the buyer walks away from the purchase then the home will go back on the market and any known issues will need to be disclosed to potential buyers. It’s generally better to find an agreeable solution than to re-list a home, but not always as some requests can be unreasonable.
11. Selling Your Home will be an Emotional Roller Coaster
Selling your home will be emotional. For most sellers just the decision to sell can be emotional. The better prepared you are for what to expect the less stressful the sale tends to be. There will be stress when preparing your home for the market, excitement when it’s just listed, anxiety about showings and feedback, and stress when assessing offers and coming to agreement with a buyer. Once under contract with a buyer there will be stress with the home inspection process, the appraisal, and, of course, packing up and leaving the place that you called home. An experienced agent will know what to expect and walk you through the process to help reduce the stress as much as possible.